The present description relates generally to the field of generating and managing purchase orders. More particularly, the present invention relates to a method of and system for generating purchase orders using an auction process to determine a supplier for a retail product or service.
The retail business can require that certain purchase orders be processed in a very short amount of time, while other purchase orders must be placed in advance of the desired delivery. For example, changes in current trends in the fashion industry may require that inventory be increased on short notice. Additionally, fashion articles may require ordering well in advance of delivery, in some cases six months or more in advance. For certain aspects of the fashion industry, items may be required to be ordered one or more seasons in advance. An advantageous purchase order system must accommodate this variation in lead times of the ordered items without unnecessarily tying up funds.
Further, tracking inventory and budgets for seasonal items can be important to the profitability of a business. For example, identifying a particularly fast selling item and ordering additional quantities to arrive on time and within a prescribed budget may increase the profitability of a retail location. Accordingly, it is important for a business to carefully plan and schedule purchasing orders for retail products and services to ensure on-time procurement or scheduling within budget constraints. Optimizing the smooth flow of the procurement process increases an enterprise's efficiency and competitiveness and determines its success.
As part of the procurement process, retail businesses and service providers often seek to obtain preferential buying terms by soliciting bids or quotations from several suppliers (e.g., vendors, manufacturers, wholesalers, etc.) for a particular retail product or service. For example, a retailer in the fashion industry may solicit bids from several competing suppliers of basic fashion articles using an auction in order to select the supplier or vendor. The fashion retailer may then select the supplier whose bid provides the most favorable buying terms (e.g., pricing, delivery conditions, etc.) as the source for certain basic fashion articles. Accordingly, optimization of the smooth flow of the procurement process includes efficiently facilitating the solicitation of bids from several suppliers in order to select the best source of a retail product or service.
In view of the foregoing, it would be beneficial to provide a method of and system for generating a purchase order which uses an auction process in order to determine a supplier and price for a retail product or service.